Oil price rises as markets tighten ahead of Iran sanctions
Written by Morenike Adebayo on September 24, 2018
Oil prices rose today as U.S. markets tightened just weeks ahead of Washington’s plan to impose new sanctions against Iran.
Brent crude futures were at seventy-nine point eight four dollars per barrel.
U.S. West Texas Intermediate (WTI) crude futures rose to seventy-one point five two dollars a barrel.
Some oil pricing interested stakeholders predict oil to rise to hundred dollars in January 2019.
The market was “increasingly concerned about dwindling (U.S.) inventories,” ANZ bank said today.
U.S. commercial crude oil inventories C-STK-T-EIA are at their lowest level since early 2015.
While output C-OUT-T-EIA remains around the record of eleven million barrels per day (bpd), recent subdued U.S. drilling activity points towards a slowdown.
The tightening U.S. market came ahead of sanctions that Washington plans to implement against Iran’s petroleum exports from early November.
Many analysts expect the sanctions to result in a drop of more than one million bpd of crude exports.
The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, as well as top producer Russia, are discussing raising output by five hundred thousand bpd to counter falling supply from Iran, although the discussions are not finalized.